From the Crows' Nest

Ken Miller (00:10):
Welcome to From the Crows Nest, a podcast on electromagnetic spectrum operations or EMSO. I'm your host, Ken Miller director of advocacy and outreach for the association of all crows. Thanks for listening. In today's episode, I am here in the studio, in-person with my guest, Dr. Bill Conley. He is the chief technology officer at Mercury Systems, and we are going to discuss challenges in the headlines today with micro-electronics ecosystem and supply chain. Before we get started, I want to thank our episode sponsor, Northop Grumman corporation. Northop Grumman provides full spectrum superiority, their innovative multifunction interoperable solutions ensure war fighters have full spectrum dominance to make realtime decisions, no matter the environment or domain. Learn more at ngc.com/ew. All right, I'm here with Dr. Bill Conley, chief technology officer at Mercury Systems. He is well known to the EMSO community, not only in his current role, but also in his previous roles as director of VW, and the office of the secretary of defense, and also at the Defense Advanced Research Projects Agency also known as DARPA. Dr. Conley, it's great to have you here in-person from the Crows Nest.

Dr. Conley (01:15):
Thanks, Ken. It's awesome to be here with you in-person today.

Ken Miller (01:18):
Well, we have a lot to get to today on an issue that is receiving a lot of attention across DOD industry and Congress. There's a lot to unpack. So I wanted to start with the big picture. And, we'll try to get into the specifics. Everyday in the news, we see stories on micro-electronics, and how the supply chain is impacted. And typically, we see these headlines that'll take months, if not years, to correct. So I want to start with talking about why this is such an important issue today and how we got here. And then, if you could talk a little bit about why from an EMSO community perspective, it's an issue that we need to be paying close attention to.

Dr. Conley (01:52):
So Ken, first off, thanks for having me on the podcast today to talk about this critical issue around micro-electronics and what it means for our community. It is a very dynamic ecosystem that we now are living in, but I actually want to back up and talk a little bit about the history of Silicon Valley. Which in large part, actually really got its start doing R&D to support electronic warfare during World War II. And so, many of that initial companies coming out of Silicon Valley actually got their start with government funding doing EW. And so, when we look at what's happened today, what we're really seeing is the micro-electronic supply chain, due to COVID... In a world before COVID, we all would go down, we'd buy a car, we'd sit in it, we'd commute to work on a daily basis, but we really only had one computer that we would sit at on a daily basis.

Dr. Conley (02:36):
And so, in comparison to today, we've really shifted our priorities in terms of what we buy. Ultimately, that resulted in a disruption in terms of what's getting built in the plan cycle associated with micro-electronics, but I think is really germane and important to the EMSO community. And really the reason for talking about it here in this forum, is the fact that, all of EMSO capabilities are underpinned by being a software defined system. And, really the capability is defined by that ability to access the state of the art micro-electronics and integrating them, in a way that meets our requirements, be that latency, power, bandwidth, beam forming, for example. And so, that access to the underlying electronics really gives us the EMSO capability we know today.

Ken Miller (03:16):
Yeah. You mentioned, a lot of this is due to COVID-19. But, did COVID-19, did that put the spotlight on existing issues, or problems that were not receiving attention, or did it accelerate certain gaps, or did it actually just cause them and put us in the position we are in today?

Dr. Conley (03:34):
I would say, a little bit of all three. And so, from an accelerating the gap standpoint, fundamentally, if you back up to the 1980s and you think about the first VCR and the first camcorder that we had, those were really cool, but through the '90s and the 2000s, the proliferation of wireless technology mirrored up with silicon technology really resulted in this global community around, be it now today, 5G, right? But cellular communications and ultimately that proliferation of electronic warfare, roughly, things of interest to us as a community in EMSO, across all of our daily lives. So, there was a part there. In the 1980s, there also were changes in the tax code that really drove the offshoring of micro-electronics manufacturing. And so, while we, the United States still have substantial investments in the design tools associated with building those micro-electronics, much of the intellectual property associated with manufacturing it, is now resident across Southeast Asia and the Pacific Rim.

Dr. Conley (04:31):
And so, that part obviously has been playing out for four decades. Due to COVID though, and when you're running a fabrication, you have a two to three year horizon that you're always planning, what is it you're going to be producing? That initial market disruption and the changes of everybody looking at their supply chain and trying to predict what do I need to build? What is a consumer in a few months going to want to buy? A lot of people that had orders in, decided to cancel those orders. And a lot of people that didn't have orders in went egads, there was this massive demand. We all remember the demand for toilet paper, right? Something that shouldn't be that hard, but obviously created a supply chain disruption.

Dr. Conley (05:08):
Similarly, I think if we look at most of us today, we actually have a home office fully set up with monitors, cameras, headsets, and everything. We have an office in the office equally set up. And many of us still have a travel bag that still has a bunch of electronics in it as well. And so, we've seen really a dramatic increase in terms of that connectivity that we now expect to have. At the same time, many of us didn't go into the office for over a year. We dramatically reduced the number of miles we were driving. And so, it's a combination of all three of the factors you identified earlier.

Ken Miller (05:37):
And you mentioned, since World War II, with Silicon valley, a lot of the early technology there was obviously related to electronic warfare. And today, it's clear that DOD programs require the state of the art micro-electronics, but there are limitations across the board on that. And so, I wanted you to discuss a little bit of the dependency that DOD has on micro-electronics. From the Crows Nest in previous episodes, we've covered a lot of these topics of information networks and the JADC2 construct, obviously there's EMSO itself. And, other things like artificial intelligence. So, could you talk a little bit about how DOD has evolved, and where it's at today in terms of its dependency on micro-electronics?

Dr. Conley (06:17):
So, Ken, another excellent question. I would actually argue though, in asking the question, you actually jumped to a very high-end part of the micro-electronics ecosystem. If you actually back up, and just think about a tactical vehicle that has an engine and needs a basic engine controller, that's a micro-electronic system. What about the jet engine and aircraft, that again, is this very a control system. That again, depends on access to modern micro controllers to make that engine run. And so, once we can do those foundational things that actually allow us to build the platform, we then can start talking about the payloads and the warfighting capability we want to bring in.

Ken Miller (06:51):
But is that part of the problem where we automatically want to jump to the construct? And we forget about what's right in front of us, and some of the foundational things that we have to take care of.

Dr. Conley (07:00):
So, from a supply chain management standpoint, I think that the dependencies and the understanding of what are those core foundational micro-electronics, that are going to allow us to build the platform, build the vehicle, get the controller on that engine. We understand what those are, but there's only a finite fabrication capability, there's only a finite packaging capability. We have to make sure that we're putting the right priority on those, along with the right priority on these advanced exquisite capabilities we're really excited around. JADC2 and the ability to do streaming analytics on all of this really high quality data that's coming in to ultimately allow a commander to make a faster decision, go around the OODA loop quicker and better, than an adversary commander. We can't forget about those foundational pieces that are essential for the basics. At the same time, we also need access to those advanced nodes that allow us that capability to do real-time streaming analytics on all of this data.

Dr. Conley (07:53):
We like to say that we live in the information age. I would actually say in many ways, we live in the data age. One look at email inbox, I have a lot of data. What I would do to know what that information is, but for a battlefield commander, the number of sensors out there that are capturing data, but not necessarily giving decision quality data. How do we process that in near real time? And how do we turn that into something actionable, where we have data at the necessary quality to make a good decision? How do we know it wasn't spoofed by an adversary? How do we know it wasn't corrupted or hacked in some way, shape, or form. So it's really, how do we have security? How do we have trust? How do we have the necessary explainability as you hit on artificial intelligence earlier? How do we make sure we get that right? So, our commanders on a battlefield can make the best decision and do so quicker than a competitor.

Ken Miller (08:40):
And it all goes back to how we make those products. And, you mentioned how we prioritize certain things. And, when you look at the supply chain, there's a number of gaps. And, I want to go through them, because it's easy to hone in on one particular gap or talk about one perspective, but it's a wide range of things, from materials, the availability of rare earth elements, to the volume. How much do you produce? Particularly in the defense sector, you're talking low volume versus commercial sector, which is high volume. Infrastructure, human capital, I think is a huge issue. So, not to put too much onto your plate here on the next question, but I wanted to talk a little bit about the role that these specific gaps play in the bigger picture. So maybe we can talk a little bit about materials and just work our way through some of these gaps.

Dr. Conley (09:25):
So, one of the things I really like about the question is, it sets me up to think about this problem holistically. Many times, what we find is a lot of excitement around the fabrication, right? And the ability to produce this advanced silicon. But what does it take to run a fabrication? Well, there's a bunch of silicon, there's the wafers, right? That basic building block that goes in, there's organic substrates that you need if you want to build an interposer and make sure that you have that robust. There's everything associated with the packaging side that you also have to get right. And so, what I would say, and the question really set me up to talk about this, is you have to view it holistically, you have to view it as a entirety of the value stream. The other thing that I would actually say, is I think also really critical, is thinking about your supply chain and what's acceptable during piece time, but also being prepared for what happens during a conflict. And so, how do we think about quality, security, trust and what's different out that in peace time, versus during a conflict.

Ken Miller (10:18):
Could you elaborate on that a little bit, in terms of how that affects these individual pieces?

Dr. Conley (10:23):
Absolutely. So, many of the foundational materials, like an organic substrate or a silicon wafer, I'm very comfortable if that was sourced globally, during a relatively peace time, right? A quality inspector being that first line person to go ahead and receive the wafer and take a look at it can say, "Yes, this is of the quality we need to go into our next step of our process." Or, "No, it is not." However, during a conflict, when you think about where do many of those substrates and where do one and many of those wafers come from today, it's somewhere in very close proximity to the south or east China sea. And so, when we think about what are the consequences of having a supply chain, that fundamentally basically says, you have to have logistics access from a global trade standpoint through either or both the south and the east China sea.

Dr. Conley (11:08):
Similarly, you could look at the same thing, if things were heat up in Europe, going into Asia. What does that mean from a global supply chain site, and actually having the ability to move all the materials, and execute each of those steps.

Ken Miller (11:21):
And if you try to address a problem from a piece time perspective, you could still end up in a much larger problem, come a war time period. Because, there are certain attributes that you just have to address specifically, when it comes to war time, because those supplies are going to dry up.

Dr. Conley (11:40):
Yep. And so, many of those raw materials... As someone who enjoys history, it is shocking to me in the era we live in today, how much is still governed by geography and how much is still governed by access to the raw materials.

Ken Miller (11:53):
Earlier, you hit a little bit on trust, and the issue of zero trust approach to enable acquisition of assured micro-electronics has gotten a lot of media attention recently. How do we strengthen assurance metrics, against the likelihood of that security vulnerabilities could be introduced into a component at any time and with little or maybe even just insufficient detection.

Dr. Conley (12:15):
So, I think it's a really rich area to talk about. And candidly one we could explore for several hours. And it's also an area, for my role as the chief technology officer at Mercury Systems, I spend a lot of time thinking about. From a framework standpoint, though, what I think is really germane to the audience today, is there's a natural balance between how strategically valuable is a particular system? How trusted is the supply chain that goes into it? And how much security can you add on in operational time, that allows you to have more confidence in that system?

Dr. Conley (12:47):
At the same time, from the business side of that, we're globally seeing an increased focus on protecting intellectual property. And so, one of the best ways to really be able to do that is through compartmentalizing your development and your production. As I use the word compartmentalization, for many listeners on the podcast, I'm not talking about special security protections and compartmentalizing from a security side, but actually compartmentalizing through more of a commercial intellectual property side.

Dr. Conley (13:12):
And so, many of the principles of DevSecOps that are now getting used for software development are also equally applicable for what's possible on the hardware side, right? That ability to have a portion of your team, which has full access to the underlying code, the underlying design, the ability to go in and modify. But the next really critical part as you think about DevSecOps is that automated testing, that every piece automatically goes through. When we think about something going through a hardware-centric supply chain, how do we bring in that principle? How do we do more quality acceptance testing to make sure that a module, at whatever level that may be, is behaving in the way that you expect.

Dr. Conley (13:48):
And then at the same time, from a security standpoint, it may be something as easy as just a firewall that makes sure you understand the data going on and off, of that micro-controller. And making sure it's behaving in the way that you expect. It may be something about how the system boots up, right? Windows has a safe mode that it can boot up into for a reason. Similarly, what does that mean for a military system, if you want to have a guaranteed safe mode?

Ken Miller (14:09):
And that's going to take constant testing and evaluation of a system throughout development from the early is components to the actual final in the field system. You're going to have to test it and evaluate it constantly to make sure there is not a vulnerability that's injected at any point.

Dr. Conley (14:26):
Completely agree with you there, right? And so, at each major step, you're going to be testing. You're going to end up with design artifacts. Overall, digital engineering, I think really helps us with this. As you build a digital thread, you actually begin to develop that digital chain of custody that goes along with that product the entire way through. One of my favorite quotes though, around zero trust actually comes from Lisa Porter, the former deputy under secretary of defense for research and engineering. And, likely paraphrasing her a little bit. One of the things she said is, "You obviously don't want to use a compromised supplier when you think about zero trust." At the same time, though, there isn't the ability when the military ecosystem consumes only 1% of the micro-electronics used globally. If it's only 1%, we can't go to a strategy that totally depends on cleared facilities, and cleared personnel to be able to go through and execute everything. We simply aren't enough of the market to be able to do that.

Ken Miller (15:19):
So, it's too costly to fix, but it's too important not to.

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Ken Miller (16:26):
So, before we get to solving the world's problems on this issue, I wanted to talk a little bit about a new report that was just released from the Hudson Institute written by Brian Clark and Dan Patt, called Regaining the Digital Advantage. And there's a lot of good information. I hope to have them on a future podcast. So, I don't want to steal their thunder, but they establish an interesting framework for assessing the micro-electronics ecosystem. And they go through who basically four categories or terms, resilience, assurance, demand, and new value. And I was wondering if you could talk a little bit about how those pieces come together in this ecosystem.

Dr. Conley (17:04):
Absolutely. And so, both Brian and Dan are good friends and as a result of that-

Ken Miller (17:09):
Which is why I'm also comfortable asking you this question.

Dr. Conley (17:12):
... Perfect. Right. And so, I think from a framework standpoint, they hit it out of the park, right? And so, one of my earlier comments around... People get really excited about the fabrication, but they don't think about everything else that goes into feeding it, and everything else that you have to do after you've gotten there. And so, with that in mind, from a resiliency standpoint, right? That goes back to my comments around what do you do during peace time? And what do you during war time, to make sure that you have something that is resilient through all of that?

Dr. Conley (17:39):
From an insurance standpoint, that ability that you have confidence in your system when it's running, that is doing that what you expect it to do. We're rapidly moving from a world where the human used to be the key processor of all data, right? The human was in the loop. And in many ways we're very comfortable with that. But decisions that are made in real-time from an EMSO standpoint are candidly made faster than a human is capable of processing that data, digesting, and going ahead and responding to it, right? Radar pulses are measured in microseconds for a reason, maybe up to a millisecond. As a human, that's not even enough time for me to blink, let alone make a decision and do any keystroke to go ahead and respond.

Dr. Conley (18:16):
And so, with that in mind, our confidence that the system is doing what we want is in many ways, very similar, I think to the investments we're seeing around explainable AI. And, making sure that we understand not only what a system did, but why did it do it? And are we as a human comfortable with the logic and the analysis that went into it. From a demand and a new value standpoint... Earlier I mentioned that only 1% of the micro-electronics produced globally are actually going into a military-end application from a system standpoint.

Dr. Conley (18:46):
And so, if you want to be able to really leverage that larger ecosystem, you have to look at ways to change that demand curve. And so, one of those possibilities is what does it mean to look at critical infrastructure more holistically? What really is critical? We may end up touching on that a little bit more later. But how do you generate more demand? And then lastly, from a value side, like I said earlier, the intellectual property, largely for the design side is in many ways resident here inside of the United States. In comparison, the intellectual property from a fabrication standpoint and what it takes to fully go ahead and build that ship and actually put it into a package, much of that intellectual property is now overseas. And so, from a value standpoint, how global do we want that supply chain to be? And where are we come comfortable having core bits of that intellectual property, in a way that allows us to meet our national security objectives?

Ken Miller (19:36):
I like the point that they make, and one of the many points that they make in this. And, a lot of the solutions are geared to the supply side of the problem, "Do we have enough of this?" And, they challenge stakeholders to look at the demand side. And so, when we talk about supply chain fragility. There's also, I guess, you could say a demand chain fragility. And, how do we solve that aspect of it is very critical. And it's a different way of looking at it. I think, then gets a lot of attention in the news today.

Dr. Conley (20:04):
It's interesting, right? Going back to one of the things we touched on earlier around those foundational micro-electronics going into a wheel tactical vehicle or a jet engine controller. What's different about that micro-electronics required for a military application, versus a purely civilian? What's different about that for a ground vehicle, versus a vehicle that we might drive here in today, right? And so, ideally we can end up with a lot of commonality in terms of the demand that the Department of Defense and that military end-use is actually putting into the micro-electronics ecosystem. At the same time, I think the same is actually possible in many ways, when we look at many of the foundational investments the government made to direct digitization. I remember when Pete Craig from the Office of Naval Research, about 10 years ago, put out his solicitation where he wanted 1 to 110 gigahertz, broadband, completely tunable across that range, and able to go ahead, and process any of it.

Dr. Conley (20:58):
I remember when Bill Chapel was pushing for direct digitization, for basically, anything that you can bring in, "Let's just directly go ahead and digitize." And we're now reaching a point, with tens of gigahertz sample rates with our analog to digital converters, or digital to analog converters, that in many ways, we're seeing those foundational investments play out. But we also are beginning to see commercial utilization of that technology in ways that actually allows us to spin it back in for the aerospace and defense market, and those EMSO capabilities that we're talking about today.

Ken Miller (21:29):
So, in looking at the solutions that are out there, or the possible solutions, we have to make some tough decisions on what to invest in, but also how to balance that investment, because there's no one single solution that's going to fix this. So, I want to go through a couple of different solution areas, and get your thoughts on how we need to improve or balance investment in these. And, I'm going to start with the most interesting, I think probably to you and your background, is of course, being innovation and how we invest in innovation.

Dr. Conley (21:55):
So I would argue, right, that speed of how do we take something from a laboratory great idea, and how do we move it to the fabrication, right? And so, lab the fabrication. It begins to set up the first part of that. And so, one of the things that I think is really exciting, that really supports that zero trust architecture ecosystem, is that ability to reuse intellectual property and particularly doing so through 2.5D so-called chiplets. And so, with that in mind, what you now are building is not the entire ASIC, and not the entire system in one piece of silicon, where one person actually has access to the entire design, but your actually allowing for compartmentalization and specialization of each of the different modules that goes in.

Dr. Conley (22:35):
For those of us that came out of the electronic attack community, this feels very familiar to us, right? You used to have a front end, you used to have a dedicated, mixed signal capability that would digitize that, you would then go into dedicated signal processing blocks. And ultimately, you would put something up on the scope in front of an operator, allowing them to decide what they wanted to do. Today with the miniaturization of micro-electronics, that has all gone on to a couple individual ASICs, but it's a couple pieces that really represent that core capability. For where we are though, with that lab technology that's been transitioning over the last five years, holistically across the semiconductor industry. With chiplets, you now actually allow someone to take a chiplet that is just the ADC. A chiplet which is just the digital analog converter. A chiplet, which is just the dedicated digital signal processing that does unique things that we in the electronic attack community would care about.

Dr. Conley (23:26):
And then, enough general purpose processing capability, likely a field programmable gate array. You actually can blend that through an [interpose 00:23:34], you're going to end up with what appears to be one packaged part. But by doing that, it helps the fabrication side, because yields go up, because each piece of silicon is actually getting smaller. It also allows performance to go up, because you now can optimize the heterogeneous material, if something is better on GaN, if it's better on Silicon, better on indium phosphide. You can optimize for where you want that to be. And at the same time, you can optimize that design for what are the places where you get the most benefit for going to the most advanced number of nanometer silicon node that is out there today, versus a dedicated DSP, which is working at high speed, is definitely streaming the data, but it may not demean to be realized in each individual advanced nanometer node, when each of those comes out.

Ken Miller (24:15):
What changes does DOD need to make in terms of its acquisition R&D processes to really jump into that area and invest in those types of solutions, because it seems to run a little bit counter to how they're used to developing advanced technologies in the R&D.

Dr. Conley (24:32):
So, I would actually argue, I don't think the DOD necessarily has to make any sweeping changes. I actually think it's going to be naturally the architects, the systems engineers at the houses that specialize in building electronic attack systems, are going to say, "Here is a better way to get leverage, to get reuse, to build a more affordable, more capable system faster. This is the right way to do it." From a speed standpoint, if you can take something that used to take five years to design an ASIC, and instead with a 2.5D base capability, you can actually go through and implement that design in 18 to 24 months, find me a defense customer and find me a prime working in the electronic world, inside of electronic attack, that doesn't want to shave three years off of their critical path of their program. Everyone is obviously going to lean in and want to do that.

Ken Miller (25:21):
Because that's imperative in today's war fighting.

Dr. Conley (25:24):
The competitive environment that we live in today, it is absolutely the right thing to do. And if the government was to receive two proposals and one said, "It's going to take five years." And the other says, "It's going to take two." I feel pretty confident, I know which one the government will have a strong preference for.

Ken Miller (25:37):
And they'll figure out a way to get it done.

Dr. Conley (25:38):
Yep.

Ken Miller (25:39):
A couple other solution areas that come to mind in our discussion, one is of course, the use of subsidies and direct funding for various sectors. And then, also private public partnerships and collaborations, both trying to facilitate that from the ground up approach to some of these solutions. Could you talk a little bit about those?

Dr. Conley (25:59):
Absolutely. So, subsidies... As a taxpayer in the United States, I'm always a little bit concerned, candidly, about the longterm viability of the approach. In particular, when there's areas where the commercial market has something which is close. Typically, the commercial market will catch up and will pass. At the same time, there are things like directed energy, where the power levels, the thermal management technologies that are required there, are going to be unique to directed energy, right? And so, fully embracing EMSO as that full integration of electronic warfare and spectrum management, but with directed energy being part doctrinally of electronic attack, right? So there absolutely are areas where direct government investment is going to be required. At the same time, there may be areas where the government says, "Hey, I really value this. I really care about this." And as you look to spin a technology from a defense application out into a larger commercial world.

Dr. Conley (26:49):
At the same time, though, the DOD has to be very open-minded to many of those technologies actually are going to come spinning in. Public private partnerships, this one is interesting. And as we were preparing for this podcast, I spent a lot of time think about this. And, what has changed in the ecosystem and would a public private partnership, what would it take to be successful today? And so, one of the earlier questions as we were going through and talking was really around, what was the impact of COVID? And, you identified three major areas to think about that through. And so, while over the last two years, it's really been the change due to COVID that has forced us all to respond very quickly and very dynamically to changes in our ecosystem, would a public private partnership have been capable of making the necessary changes and getting the right agreements between the private side and the public side quickly enough, to be able to adapt to the challenges that we've experienced during COVID?

Dr. Conley (27:46):
And so, right, full disclosure. I am very optimistic that we will never see another pandemic in our lifetimes that has anywhere near the scope. And so, perhaps that's a worst case scenario to think about. But one could imagine, a transition from a time of relative peace to a conflict, would be a similar global disruption. And it would be a shame if the public private partnership wasn't able to deliver at that exact moment, because things about the agreement had to be changed in some way, shape, or form. And so, I think we have to be very deliberate when we think about that, overcomeable. But, we have to go through with an open mind and really plan for those.

Ken Miller (28:21):
Now, in DOD, and as well as Congress, there's a number of policy recommendations floating around out there. We'll talk a little bit about what's going on in Congress here shortly. But, I wanted to get your opinion on how we can address some of these problems from a policy perspective.

Dr. Conley (28:37):
So, the policy one is obviously... Having been in the Pentagon, right? Policy is one of those levers that you have access to, that you can move, that you can change how things are approached. Typically, through the lens of micro-electronics, the first lever that people almost immediately jump to is thinking about a change in terms of, what is critical infrastructure? And can you change the demand, right? Going back to the report from Brian and Dan, as they were talking about the demand ecosystem, plenty of other people have written and talked about this as well. What's interesting though... And so, for those of us on the east coast that were impacted earlier this summer by the pipeline hack, from what I have been reading recently, it actually wasn't that the attack got to the industrial controllers that actually allowed for the flow of gasoline. It got into the billing and the accounting network of the company. And because they couldn't do the accounting to figure out who picked up how many gallons of gasoline, where along the way, they actually shut down the flow of fuel up and down the east coast of the United States.

Dr. Conley (29:34):
And so, then the question is, well, what is critical? Is it the billing and accounting network? But, when you think about all of the different things from my phone, from my computer, that I'm doing online shopping on a daily basis. I'm interacting with a massive number of different billing and accounting based systems on a very regular basis. And so, I think we have to be very deliberate when we think about critical infrastructure. What is it that causes a business to interrupt their flow of goods into the marketplace? And it may not be that industrial controller, which necessarily is what most of us mentally, immediately think about that may actually drive that change. And so, again, these are the things that I read about in the nights and the weekends, but I think we have to be deliberate as we think about that policy lever, and what will be the intended, but also the unintended things, if we make any changes there to try to general rate more demand.

Ken Miller (30:21):
One of the recurring themes that we address here on the show, through various issues is this notion of government risk and the ability for DOD to accept a level of risk. That risk acceptance level is starting to rise, quite rapidly, that they have to accept more and more to catch up to some of these problems. So, I was wondering if you could talk a little bit about what government needs to do. And then, how does government risk acceptance differ from industry risk acceptance?

Dr. Conley (30:49):
Another great question. And, candidly, I think, one of the things that, professionally, I really enjoy about my time, both in government, understanding the government risk profile, as well as my time in industry and understanding what are the types of risks that industry is more broadly concerned about. The other thing I've actually been reading about a lot over the last couple years is the history of the defense industrial base, which may sound like a bit of a boring topic, but in many ways it's actually really fascinating. And so, when you look at the industrial base that we have today, it is in large part based off the way the government invested capital during World War II, and continued to invest capital through the Cold War, to build what we recognize today as the so-called DIB, the Defense Industrial Base. And so, over eight decades, there's a lot there.

Dr. Conley (31:32):
At the same time, I think there's actually a lot of really interesting innovation occurring around business models. And we're beginning to see new entrance largely in that electronics system space, critical for EMSO, that are beginning to enter the market. And as a function of entering the market or beginning to challenge that belief, that growing a DIB company actually requires government capital. And so, with that in mind, the balancing of who's taking risk, and who's investing the capital? And ultimately, what is the appropriate profit side for someone to end up with? With that in mind, I think it'll be really insightful and really interesting to see how these companies on the industry side end up growing. And, if they are able to be fully successful in the way that their investors are looking for them to be.

Dr. Conley (32:18):
From the government side of the problem though, and the government side of the risk ecosystem, the reality is, is that the micro-electronics ecosystem is going to continue doing a variety of things for consumers, regardless of what the government says, "Hey, I would like to see this, or I would not like to see this." It's a global ecosystem and there's global drivers, that are definitely going to do that. And so with that in mind, with the acceptance that we live in a globally connected, globally distributed world, where this supply chain is going to remain global into the future on the basis of how we have built everything up, to have access to these modern technologies, I think that's the reality that we live in.

Dr. Conley (32:57):
What is an acceptable level of risk that the U.S. government, or any government is willing to take? And how do they manage their way in terms of what they're investing in from inventory, call that a strategic stockpile? And at the same time, where are they putting their bets down in terms of what are the raw materials they're going to need? What are the finished goods that they want to go ahead and carry in inventory? And, how quickly can they energize a much larger part of the United States economy to get it there? And so, that's very different obviously than just talking about cost plus fixed fee contract types. And, when is that appropriate to use, from a risk standpoint. In many ways, I think what's happening in the commercial world of micro-electronics, there is an adequate level of confidence in terms of what is the return on investment, that you actually can find many companies willing to lean in from a contracts type in a much more aggressive way.

Ken Miller (33:45):
So one of the challenges that we often run into with trying to solve major complex problems is that we tend to want to find an easy explanation sometimes to the detriment of nuance, which can lead us to ineffective, or even counterproductive solutions. So, what nuance to this issue are we not paying close enough attention to, and how might this be skewing our response?

Dr. Conley (34:06):
So, I've thought about this and I have a couple different answers that I would offer there. And so, the reality of this is it's a really complex topic. And so, being engaged with a defense-centric complexity group in my spare time as well. Anytime you have a complex system, typically when you poke on the system, it changes in some way, shape, or form. And so, merely observing the system results in some change in terms of how it is behaving. And so, the first thing that I would hit on that isn't really necessarily nuanced, but I think is really critical that we haven't touched on, is that stability of strategy, that stability of leadership, and the stability of the problem we're trying to solve. I think if we understand the problem we're trying to solve, and we stick to it, there will actually be a lot of value that comes out of the far-end.

Dr. Conley (34:52):
At the same time, the way that we have structured, in many ways, our ecosystem inside the United States, both on the government side, as well as on the industry side, is the goalposts are all often shifting. And this is going to be a really, really hard problem to solve, if we start moving the goal post midway through going through and doing it, just because of that complexity and how intertwined all the different stakeholders are. The second thing though, that I would offer, is how can the department of defense and that user actually be a better consumer, and therefore be able to align with other demand signals in a better way. And so, we touched on a little bit of that earlier, right? Just those basic micro-controllers going into vehicles and engines, is absolutely one aspect of that. But I also think that larger trend around software defined radios, around direct digitization begins to open up ways that EMSO capabilities can explicitly actually end up better leveraging things that are happening on the commercial side, anyway.

Ken Miller (35:49):
We've talked a lot about, government response and the defense industrial based response. And, as always, there's always that third piece to this puzzle. And that's the role that Congress is going to be playing. And, they just recently brought to the floor... The house did, on the National Defense Authorization Act for the next fiscal year. And, there's some really good stuff in that bill and obviously addresses a lot of issues, but there are some provisions specifically on micro-electronics. Two that caught my attention was, establishing a national network for micro-electronics research and development. Then of course, the support for zero trust within DOD. I was wondering if you had any thoughts on how Congress is responding to this, and what role should they be playing moving forward?

Dr. Conley (36:33):
Another great question. And so, with that in mind, I think one of the things that'll be interesting is both what happens in the NDAA, but ultimately what also happens in the appropriation side, as I learned during my tenure in the Pentagon, you need both of those rowing at the same direction, at the same time to really be successful. So, with that in mind, and really answering the NDAA is the most recent piece that has come out around that, right? The support for zero trust, I think is come Congress saying, "Hey, we understand where you're going. We understand why you're going in that direction. It makes sense to us. You have our back." I think is very powerful for the Department of Defense and for industry to say, "We understand how this ecosystem is evolving, and what is it going to mean to bring a trusted and secured micro-electronic capability to the market in the future."

Dr. Conley (37:17):
And so, to your point, right, Congress in many ways is the third leg of that stool. And then, the other one around the national network side, we've touched on intellectual property, obviously, as we've been going through the discussion today. And that intellectual property, that ability to bring together that appropriate network, and be able to share things, and transition things very quickly. Just the other day, I was talking with one of my peers at one of the premier research institute universities that we have here in the U.S., around what are they doing with micro-electronics? What are we doing with micro electronics? What are they doing in terms of generating that human capital that ultimately could come to work in the private sector and the federal sector? And, what is there that we are looking for out of graduates that are going into those ecosystems?

Dr. Conley (37:58):
And so, with that in mind... Again, congress, I think has a role to play there. And then, the other one that showed up about a year ago through the CHIPS Act, in a variety of ways, is that realization that there is a Department of Defense need for this. There is a Department of Commerce holistic competitiveness piece to it. And then, there is a Director of National Intelligence, Department of State role, in terms of what are we doing internationally as well. And so, I think over the last year, we've actually seen Congress acknowledge the full scope of this problem. I certainly think it's awesome when EMSO is a nonpartisan issue that both sides of the aisle can get behind. I'm really encouraged today with where we're at with micro-electronics. And how bipartisan the support is to address this challenge.

Ken Miller (38:40):
Okay. Well, that is all the time that we have for today. Thank you Bill for joining me, this has been a great discussion. I really appreciate it. And, there's a lot we did not get to, and what we probably should get to in a future episode. So, this just means that we're probably going to have to have you back here in the near future, but I do thank you for your time and joining me today.

Dr. Conley (38:56):
Yep. Thanks a lot, Ken. As always, it's great to sit down and get to talk with you.

Ken Miller (39:01):
That will conclude this episode of From the Crows Nest. I again, want to thank our episode sponsor Northrop Grumman corporation, Northrop Grumman's multifunction, interoperable solutions create full spectrum superiority for our war fighters across all domains. Learn more at ngc.com/ew. And finally, be sure to check out our website crows.org, especially for details on our fast approaching 58th annual international symposium and convention, November 30th to December 2nd, here in Washington, DC. We are back in-person and we have an amazing agenda that you won't want to miss. Also, From the Crows Nest podcast will be at the convention, and we'll be sitting down with many of our speakers. So, stay tuned for that. Thank you for listening.